We had a nice little rebound in the markets last week. The Stochastics indicator on the S&P 500 suggests this rebound could go further. Looking at other recent rebounds, last week's progress may take the S&P well above 1900.
However, we are still in the early part of earnings season. The seasonal charts for the major indexes, their track records of movement this time of year, tell a consistent story of the markets pausing until the earnings picture clears up.
The S&P 500 has averaged virtually no movement over the next few weeks:
There have been a few years with significant gains or losses. Over the next 3 weeks, the S&P has gained 7% or more in 1997 and 2009, and has lost 6% or more, in 2002 and 2010. But for most years, the S&P has logged barely 1% to 2% moves in either direction.
The NASDAQ Composite looks similar to the S&P:
The Russell 2000, representing smaller cap stocks, looks the same:
There are numerous individual stocks that look ready to break upwards, and there are a number that could break down, especially after a poorly-received earnings report. It would be best to wait until after earnings on any individual stock you are considering a short-term trade in. Watch every existing position closely, and ask yourself if you really want to ride it through their earnings release.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2014 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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